There are few solid strategies you can use when you want to trade Bitcoin and other cryptocurrencies. In this guide, I present you some ideas you can use in your trading.

Moving Averages

Averages can be a great help in trending markets. I do not like to trade based on them (I use them only as additional information) but we are talking here about Bitcoin ;).

You can use set of 2-3 averages like

100 and 200,

50 and 200,

50, 100, 200

Like in the example below:

Another option is to put more averages:

The alternative is to use Rainbow:

Or GMMA:

All these setups with averages can help you to go with a trend and to find possible support and resistance areas. Which one is best for you? Test it.

Trailing stop loss

Trailing stop loss is a great strategy. It allows you to follow trend easily. When you are in profit, you can hold to the trend for a longer period and stop loss line is clear.

I like to join trailing stop loss with other tools which helps me to verify the current trend. In the example below you can see trailing stop joined with Bollinger Bands and 100 average on 5m Bitcoin chart:

From the start, it was clear where to enter and where to close. Settings for this trailing stop are:

Another idea is to join trailing stop loss with averages. They can work both as support/resistance and trend indicator. Thanks to them you have better chances to invest in the right direction.

The best way to trade with trailing stop loss is to trade with the trend. Especially on lower time frames. You just have to wait for best setup of averages and trailing stop loss. Below Bitcoin again, 5m chart:

Settings for this trailing stop:Take a closer look at two charts above. You can see that both are 5m Bitcoin. On both, with trailing stop loss you could catch most of the 1000$ move. All that on a 5m chart! That is the true power of trading with trailing stop loss.

Fibonacci

Time frame

Fibonacci trading works on every time frame but for most traders, it is better to trade on the higher time frame. Especially when you trade Bitcoin or another crypto. Trends are strong here and you can catch bigger moves on higher time frames. Few examples below.

The 4-hour time frame of Bitcoin and simple ABCD trade:

The daily time frame of Bitcoin:

The weekly time frame of Bitcoin:

As you can see, on every one of them you can use Fibonacci to catch big moves.

Of course, Fibonacci works also on lower time frames, even when you trade Bitcoin. Example of 1-minute Bitcoin time frame:

When it comes to extensions, you can use more lines. I stick to most basic ones:

127% extension

138.2% extension

161.8% extension

200% extension

261.8% extension

Just like on the chart below:

You can add more like 238.2%, 300%, 361.8% and so on. I prefer to have a cleaner chart that is why I do not put all of them.

Or look for harmonic setups.

MACD

MACD oscillator works great when we have trending markets. You look here for two things:

are signal lines above or below 0 line

cross of signal lines

If lines are above 0 line that means that we have better chances for a move up and we look to go long. You open a trade after a cross of signal lines:

Pivot Points

Pivot Points are great because they show you where are potential support and resistance areas. You can build a good strategy with that information.

There are many Pivot indicators for Metatrader. I recommend using that one.

When you add Pivot indicator to the chart, you have to decide on which period it will be calculated. Standard is daily but there are many others to choose from:

Do Pivots work on Bitcoin chart? Of course. Just like with any Forex pair, it gives us potential support and resistance levels. Below 15m Bitcoin chart with daily Pivots:

If you trade on 1m or 5m time frames then it can be a good idea to trade with Pivot Points calculated on 1h or 4h. You switch that in settings window which I showed you in the beginning. Below you can see 1m time frame. See how Pivot works when they are calculated on 1h (so every hour we have new Pivot lines). It is clear that Bitcoin price reacts with these levels which can be support or resistance for the Bitcoin price:

If you trade on 5m time frame then it is a good idea to try Pivot Points based on 4-hours period (every 4 hours we have new Pivot lines plotted on chart). Again, Bitcoin price finds support and resistance on these lines. Below 5m Bitcoin chart with Pivot Points plotted every 4 hours:

On charts above you can see that I joined Pivot Points with MACD, Stochastic and averages. You can use other technical tools. I just like to have a confirmation of trend and signal to open and close position. I think that setup above works just fine.

Trailing stop loss, Fibonacci, and Bitcoin

when a price goes near your target (extension line) you close part of a trade (take profit)

move stop loss higher

let the rest of trade run with a trend

Like in the example below:

Pivot lines, Fibonacci, and Bitcoin

If you decided to trade on lower time frames (1h and lower) then it is a good idea to combine Fibonacci with Pivot lines. Below you can see how daily Pivot lines and extension lines helped to select the best exit point:

Ichimoku, Fibonacci, and Bitcoin

Ichimoku works best in trending condition. Bitcoin is trending so it is a nice combination of Fibonacci and Ichimoku. You use Ichimoku as a trend indicator. When you see – like below – that trend is up, you look for proper ABCD setup:

You can also use Ichimoku as a signal to enter or exit a trade. For example, a classic break from the cloud would be a good signal:

Retail trader. I trade mostly Forex, indices and some commodities. I prefer technical analysis, but I do not forget about fundamentals.
It took me a while to be profitable and learn how to trade. I like trading, but I also like to write about it and teach other people. That is why I started this blog. If you like this content check my Instagram, Facebook page and subscribe to the newsletter.

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Welcome to Fibotrading.net, forex trading blog. It is a place where you will find a ton of free trading materials. I write about trading with technical analysis, mostly about Fibonacci trading joined with Pivot Points.